Pre Session Market Analysis for May 20, 2011

Pre Session Market Analysis for May 20, 2011
The key equity averages are likely to open positive as most of the Asian stocks are trading higher following a positive finish in the Wall Street that stimulated positive sentiment in the participants.

The MSCI Asia Pacific Index gained 0.1% at 134.82 with about three stocks advancing for two that fell. Further, Japan"s Nikkei 225 is trading higher by 0.29% at 9,648.84 as the Yen weakened against the competing currency thus improving the outlook of exporters" earnings.

Shanghai Composite is up by 0.17% to 2,864.34 and Hang Seng Index grew 0.22% to 23,214.97. Separately, Seoul Composite and Jakarta Composite are trading higher by 0.54% and 0.20%, respectively. In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with upside movement. CG, Oil&Gas and Metal pivotals will be in focus today.

Today, Nifty would have a support at 5,390 and resistance at 5,465 and BSE Sensex has support at 18,014 and resistance at 18,267.

Previous Session

On Thursday, the benchmark indices closed on a positive note after construction major Larsen & Toubro"s results exceeded analyst estimates. During the morning trade, most of the Asian stocks traded higher as the U.S. Federal Reserve indicated that interest rates will remain low and metal prices increased on anticipation that Chinese demand will grow, boosting confidence in a global economic recovery.

The Japanese market closed lower after it"s economy shrank more than estimated in the first quarter after the earthquake and tsunami disrupted production and prompted consumers to cut back spending, sending the nation to its third recession in a decade.

Further, the Chinese market declined after the property developer and power producer companies plunged on concern that the country"s central bank will raise borrowing costs and higher energy costs will hurt corporate earnings. After opening in the positive terrain, the benchmark indices started trading rangebound on the higher side.

As the day progressed, volatile movements were seen but despite of touching the baseline for a number of times, the benchmark indices managed to stay in the positive terrain. The construction major Larsen and Toubro has posted 17 per cent growth in its net profit to Rs 1,686 crore, which was ahead of the street estimates and well supported the investors" sentiment.

Further, the Sensex heavyweight, Reliance Industries also surged 1.45% after plunging for three consecutive sessions. Finally, the market closed with modest gains with the support coming in from the Capital Goods and Oil&Gas space. The positive opening for the European markets has well supported the sentiment in the domestic front.

The BSE Sensex closed at 18,141.40 up by 55.20 points or by 0.31% an NSE Nifty closed at 5,428.10, higher by 7.50 points or by 0.14%. The BSE Midcap was at 6,715.23, down by 47.62 points or by 0.70% and the BSE SmallCap closed at 8,145.57, lower by 44.00 points or by 0.54%. The BSE Sensex touched intraday high of 18,198.45 and intraday low of 18,057.82.

On Thursday, the U.S. markets closed higher stocks despite some uninspiring data and lack of leadership. Data showed a fall in initial jobless claims for the week ended May 14 from 438,000 to 409,000, below the expected 420,000 thus supporting a positive tone among morning participants.

On the other hand, The Philadelphia Fed Index for May stood at 3.9, below18.0 that had been widely expected. A negative response to the data dragged the stocks into negative terrain for a while, but a downturn by the dollar helped renew support for the equity market. Further, Industrial stocks witnessed the strongest advance, but lack of weight in the overall market limited their ability to lead.

While, retailers stocks were pressurised as shares of Sears Holding (SHLD 73.86, -1.99), Limited (LTD 40.81, -1.64), Buckle (BKE 41.19, -6.71), Hott Topic (HOTT 7.25, -0.41), and Advance Auto Parts (AAP 63.49, -7.17) tumbled in the wake of their latest quarterly reports.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a gain of 45.14 or 0.36% at 12,605.32 while NASDAQ index finished up by 8.31 points or 0.3% to 2,823.31. The S&P 500 (SPX) closed higher by 2.92 points or 0.22% to 1,343.6.

The FIIs on Thursday stood as net seller in equity and net buyer debt. Gross equity purchased stood at Rs. 2,458.30 Crore and gross debt purchased stood at Rs. 585.40 Crore, while the gross equity sold stood at Rs. 2,718.20 Crore and gross debt sold stood at Rs. 340.40 Crore. Therefore, the net investment of equity and debt reported were Rs. (259.90) Crore and Rs. 245.00 Crore.

Top traded Volumes on NSE Nifty - Jaiprakash Associates Ltd. 9,365,573, Larsen & Toubro Ltd. 8,412,164, Infrastructure Development Finance Company Ltd. 7,917,962, ITC Ltd. 7,886,646, Reliance Communications Ltd. 6,361,607.

On BSE, total number of shares traded was 19.57 Crore and total turnover stood at Rs. 2,400.55 Crore. On NSE, total number of shares traded was 42.53 Crore and total turnover stood at Rs. 9,433.95 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 454,835 with a total turnover of Rs. 11,557.50 Crore. Along with this total number of contracts traded in stock futures were 562,426 with a total turnover of Rs. 14,438.40 Crore. Total numbers of contracts for index options were 3,271,788 with a total turnover of Rs. 90,084.22 Crore. and total numbers of contracts for stock options were 158,928 with a total turnover of Rs. 4,342.28 Crore.

Read more about: nse, bse, sensex, nifty
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